Tax relief cuts ‘will see landlords passing the buck’

Goudiaby says the majority of landlords are in for a shock: “According to a survey conducted by EasyRoommate, over 55% of the landlords surveyed are not aware of the tax-relief change. Landlords urgently need to familiarise themselves with the complex tax changes and its implications. “I believe that the buy-to-let tax changes will make investments a less appealing proposition for landlords and discourage investors. This increase in tax will drive landlords to recoup their losses, and what a better way of doing that other than by increasing the rent.”

44% of respondents to the survey said they would consider increasing the rent to offset the losses incurred by the tax increase.

“To make matters worse for landlords, new tax changes mean they will also lose the right to claim 10% of the rent against wear-and-tear costs from April 2016,” Goudiaby added.

“This will result in landlords reducing the levels of general property maintenance and improvements carried out, and lead to landlords neglecting basic tenant demands for property improvements. This will have a negative impact on the standard of private rented accommodation.”

Goudiaby believes the tax-relief changes could drive some landlords out of the property market altogether.

“Many landlords may now see fit to sell their property for let, resulting in tenants evicted from their rented accommodation. George Osborne claims that buy-to-let landlords have historically been taxed more favourably than home owners; I would dispute this - in fact, buy-to-let owners are not only taxed on rental income but also capital gains.”